Dividend reset realigned with capital priorities with clear path to 3.0-times or lower leverage by year-end 2028
Dividend reinvestment plan discount to be removed effective October 1, 2026, reducing shareholder dilution
VANCOUVER, BC, July 31, 2026 /PRNewswire/ -- TELUS Corporation (TSX: T) $(TU)$ today released its unaudited results for the second quarter ended June 30, 2026. Concurrent with its quarterly results, TELUS is announcing three near-term strategic priorities, a reset of its quarterly dividend, planned removal of the dividend reinvestment plan $(DRIP)$ discount and revised full-year financial guidance that reflects the company's financial priorities and its commitment to long-term value creation and balance sheet strength. An overview of TELUS' second quarter 2026 results is discussed below.
Highlights
-- Introduced three near-term strategic financial and operational priorities
to guide TELUS' performance and capital allocation going forward
including: Strengthen the financial foundation; Hone operational
discipline and reinvest in the core business; and Deploy resources to
drive profitable, sustainable growth and returns. See "Strategic
Financial and Operational Priorities" below for further details.
-- Delivered mobile phone and internet net additions of 17,000 and 20,000,
respectively, reflect a disciplined strategy prioritizing value-accretive
customer growth; connected device net additions of 187,000.
-- Mobile network revenue of $1.7 billion is up 1 per cent year-over-year,
supported by subscriber base growth and ARPU of $56.36, declining at a
decelerating rate of 0.4 per cent through a focus on premium brand
customer loading. Achieved blended mobile phone churn of 1.08 per cent,
up from 1.06 per cent in the same period last year.
-- Net loss of $1.8 billion due to a pre-tax, non-cash intangible asset and
goodwill impairment of $2.1 billion in the second quarter, reflecting a
reduction in the recoverable amount of the TELUS Digital cash-generating
unit. See "Second Quarter Financial Results Overview" below for further
details.
-- Consolidated service revenue of $4.4 billion declined 1 per cent
reflecting lower TELUS Digital growth, partially offset by continued
mobile network revenue growth and higher TELUS Health revenues. Adjusted
EBITDA of $1.8 billion declined 2 per cent, which reflects varied results
across our reportable segments and lower real estate gains. See "Second
Quarter Financial Results Overview" below for further details.
-- Capital expenditures of $678 million were recorded in the second quarter;
full-year capital expenditures have been updated to approximately $2.6
billion, reflecting inflation and supply chain dynamics impacting
customer premises equipment, strategic investment directed towards our
sovereign AI data centres, including network infrastructure upgrades and
site enablement, and additional investments directed towards customer
base management; TELUS remains committed to its 10 per cent capital
intensity target.
-- Cash provided by operating activities of $1.3 billion increased 15 per
cent and free cash flow of $545 million is higher by 2 per cent, driven
by decreased net income taxes paid and lower lease payments, partially
offset by increased interest paid and lower Adjusted EBITDA.
-- TELUS' Board of Directors declared a quarterly dividend of $0.1875 per
common share, representing a reset of 55 per cent to an annualized amount
of $0.75 per share, which is expected to generate approximately $2.7
billion in cumulative cash savings through 2028 directed toward debt
reduction; the DRIP discount will be removed effective October 1, 2026.
-- Net debt to Adjusted EBITDA of 3.5-times at quarter-end; TELUS is
targeting approximately 3.0-times or lower by year-end 2028, supported by
organic free cash flow growth, the dividend reset, disciplined capital
expenditures and proceeds from asset monetization processes currently
underway.
-- Full-year consolidated service revenue guidance revised to a range of
flat to negative 2 per cent; consolidated Adjusted EBITDA is now expected
to be in a range of negative 2 to negative 4 per cent; and full-year free
cash flow is anticipated to be approximately $1.8 billion. See "2026
Financial Outlook" below for further details.
"TELUS is built on a foundation of genuine strength -- leading networks, sustained customer loyalty and growing expertise in health and AI-enabling capabilities that are increasingly central to how Canadians live and work. The macro environment has shifted and we are responding with clarity and discipline. Today we are announcing three strategic priorities that will strengthen our financial foundation, sharpen our operational focus and concentrate our resources on the opportunities where TELUS is best positioned to win -- all in service of delivering long-term, profitable and sustainable growth," said Victor Dodig, President and Chief Executive Officer.
"I am proud to be working alongside our experienced and capable leadership team and our 100,000 passionate and professional team members across TELUS to execute on these strategic priorities, delivering improved experiences for our customers and opening opportunities for our people, and creating value for our shareholders. Our focus is on disciplined execution and ensuring maximum returns on every dollar of capital we deploy. Everything I have seen since stepping into this role has only deepened my conviction -- in this team and the admirable culture they have built, as well as the bright future ahead for TELUS," said Mr. Dodig.
"The actions we are taking establish the financial conditions for strong, profitable growth and durable, compounding free cash flow growth," said Gopi Chande, Chief Financial Officer. "In combination, the dividend reset, termination of the DRIP discount and proceeds from our monetization initiatives provide a path to achieve our leverage and free cash flow objectives. Our commitment to reducing capital intensity, combined with a disciplined focus on operational efficiency across the business, reinforce that path further. The strategic changes we are making to how this company generates and deploys cash will compound to create lasting value for our shareholders."
Strategic Financial and Operational Priorities
With the TELUS PureFibre$(R)$ network build approaching completion and capital intensity expected to decline over the multi-year horizon, TELUS has identified three near-term financial and operational priorities to guide its performance and capital allocation going forward. These are:
-- Strengthen the financial foundation. TELUS is prioritizing balance sheet
flexibility and a sustainable capital returns framework. This includes
reducing net debt to Adjusted EBITDA to approximately 3.0-times or lower
by year-end 2028, supported by the dividend reset, disciplined capital
expenditures and proceeds from asset monetization processes currently
underway.
-- Hone operational discipline and reinvest in the core. TELUS will
intensify its focus on deploying invested capital where returns exceed
the cost of capital. This includes a cost transformation program designed
to embrace technology, eliminate redundancy and sharpen the company's
focus on customer service excellence and its core competitive strengths.
-- Deploy resources to drive profitable, sustainable growth and returns.
TELUS will concentrate investment where it has the strongest competitive
position and clearest path to returns -- including its wireless and TELUS
PureFibre networks, and the digital and AI infrastructure that supports
Canada's technological independence and economic prosperity.
A more detailed outline of the capital returns framework and corporate strategy will be provided with TELUS' third quarter 2026 results in November.
Dividend Reset and Financial Policies
The TELUS Board of Directors declared a quarterly dividend of $0.1875 per share on the issued and outstanding Common Shares of the company payable on October 1, 2026, to holders of record at the close of business on September 10, 2026, representing a reset of 55 per cent to an annualized amount of $0.75 per share. The prior annualized amount was $1.6736 per share. The revised dividend is expected to generate approximately $2.7 billion in cumulative cash savings through 2028, directed toward deleveraging.
TELUS also updated its free cash flow dividend payout ratio to a range of 45 to 60 per cent of trailing 12-month free cash flow, from a prior range of 60 to 75 per cent of free cash flow on a prospective basis.
As part of resetting the dividend, TELUS has also terminated the DRIP discount, effective October 1, 2026. Shareholders currently enrolled do not need to take any action if they continue to participate in the DRIP; dividends will continue to be reinvested automatically under the revised terms.
The company had previously targeted net debt to Adjusted EBITDA of approximately 3.0-times or lower by year-end 2027. The revised timeline to year-end 2028 reflects the impact of competitive pricing pressure and reduced subscriber demand amid lower population growth on organic free cash flow generation. The 3.0-times or lower target itself is unchanged. TELUS expects leverage to decline sequentially in 2027 and 2028, supported by organic free cash flow growth, declining capital intensity, the dividend reset and proceeds from the strategic portfolio review processes currently underway.
Strategic Portfolio Review
TELUS is conducting a comprehensive review of its asset portfolio to optimize capital allocation, with proceeds from these processes directed toward debt reduction. As part of this effort, the company remains active in the market on TELUS Health--related non--core assets and is in discussions with interested parties. Similarly, the company is also advancing the monetization of non-core real estate assets. These initiatives are expected to drive further deleveraging and support the company's long-term financial objectives. Additional details will be shared as notable developments arise.
Second Quarter Financial Results Overview
Consolidated operating revenues and other income were $4.9 billion, compared with $5.1 billion in the prior year, reflecting a consolidated service revenue decline of 1 per cent, as well as lower mobile equipment revenue and Other income. A decline in consolidated service revenue was largely as a result of: (i) lower external revenues in TELUS Digital; (ii) mobile phone ARPU declining at a decelerating rate; and (iii) declines in fixed legacy voice revenue. These factors were partially offset by: (i) mobile subscriber base growth; (ii) higher TELUS Health service revenues; (iii) increased fixed data services revenue; and (iv) greater agriculture and consumer goods services revenues. See 'Second quarter 2026 Operating Highlights' within this news release for a discussion on TELUS' reportable segment results for TTech, TELUS Health and TELUS Digital.
In the quarter, TELUS recognized a non-cash impairment of $2.1 billion relating to TELUS Digital, as the recoverable amount of the TELUS Digital cash-generating unit was less than its carrying amount as at June 30, 2026. See Note 18(b) of the interim consolidated financial statements for additional details. TELUS recognized a net loss of $1.8 billion and a basic loss per share of $1.17, reflecting the after-tax impacts of a decline in Operating income and greater Financing costs. When excluding certain costs and other adjustments (see 'Reconciliation of adjusted Net income' in this news release), compared to the same period last year, adjusted Net income of $254 million decreased by 26 per cent, while adjusted basic EPS of $0.16 was down 27 per cent. Adjusted Net income is a non-GAAP financial measure and adjusted basic EPS is a non-GAAP ratio. For further explanation of these measures, see 'Non-GAAP and other specified financial measures' in this news release.
Compared to the same period last year, consolidated EBITDA decreased by 5 per cent to $1.6 billion. Adjusted EBITDA declined by 2 per cent to $1.8 billion reflecting varied results across our reportable segments. See 'Second quarter 2026 Operating Highlights' within this news release for a discussion on segmented Adjusted EBITDA results.
Our TTech subscriber base of 17.9 million connections increased by 6 per cent over the past 12 months, reflecting a 1 per cent growth in our mobile phones subscriber base to 10.3 million, a 20 per cent increase in our connected devices subscriber base to 4.8 million, and a 3 per cent growth in our internet subscriber base to 2.8 million.
In TELUS Health, healthcare lives covered were 158.9 million as of the end of the second quarter of 2026, an increase of 1.8 million net of churn over the past 12 months, mainly reflecting growth in our family assistance programs across all operating regions, in addition to ongoing demand for virtual solutions.
Cash provided by operating activities of $1.3 billion increased by 15 per cent in the second quarter of 2026, primarily driven by other working capital changes, a decrease in income taxes paid, and lower restructuring and other costs disbursements. These factors were partially offset by an increase in interest paid and lower EBITDA. Free cash flow of $545 million increased by 2 per cent compared to the same period a year ago, largely driven by decreased net income taxes paid and lower lease payments, partially offset by increased interest paid and reduced EBITDA.
Consolidated capital expenditures of $678 million were flat in the second quarter of 2026. Capital expenditures in support of TTech operations of $614 million increased by $44 million, primarily from greater capital investments in developing new facilities to meet growing industry demand. TELUS Health capital expenditures of $44 million decreased by $15 million, largely driven by decreased investments in clinic expansions and business acquisitions. TELUS Digital capital expenditures of $34 million decreased by $9 million, mainly driven by prior year software license investment and decreased site expansions in Europe.
As at June 30, 2026, our 5G network covered approximately 34.2 million Canadians, representing over 92 per cent of the population.
Consolidated Financial Highlights
C$ millions, except footnotes and unless noted Three months ended
otherwise June 30 Per cent
(unaudited) 2026 2025 change
---------------------------------------------- ---------- -------- --------
Operating revenues (arising from contracts
with customers) 4,920 5,031 (2)
Operating revenues and other income 4,929 5,082 (3)
Total operating expenses 6,501 4,907 32
Net income (loss) (1,830) (245) n/m
Net income (loss) attributable to common
shares (1,840) 7 n/m
Adjusted Net income(1) 254 342 (26)
Basic EPS ($) (1.17) -- n/m
Adjusted basic EPS(1) ($) 0.16 0.22 (27)
EBITDA(1) 1,588 1,679 (5)
Adjusted EBITDA(1) 1,777 1,812 (2)
Capital expenditures(2) 678 678 --
Cash provided by operating activities 1,342 1,166 15
Free cash flow(1) 545 535 2
Telecom subscriber connections(3) (thousands) 17,946 16,923 6
Healthcare lives covered (millions) 158.9 157.1 1
---------------------------------------------- ---------- -------- --------
Notation used in the table above: n/m -- not meaningful.
(1) These are non-GAAP and other specified financial measures, which do not
have standardized meanings under IFRS Accounting Standards and might not
be comparable to those used by other issuers. For further definitions and
explanations of these measures, see 'Non-GAAP and other specified
financial measures' in this news release.
(2) Capital expenditures include assets purchased, excluding right-of-use
lease assets, but not yet paid for, and consequently differ from cash
payments for capital assets, excluding spectrum licences, as reported in
the consolidated financial statements. Refer to Note 31 of the
consolidated financial statements for further information.
(3) The sum of active mobile phone subscribers, connected device subscribers
and internet subscribers, measured at the end of the respective periods
based on information in billing and other source systems. Effective
January 1, 2026 with retrospective application to January 1, 2025, we
have revised our subscriber reporting to apply a product-intensive focus
on our core bundling foundation of mobility and internet and thus will no
longer report TV, security and automation and residential voice
subscribers. This change concentrates our disclosure on our core bundling
foundation and enables us to better serve our customers, while supporting
the migration from legacy products and services to integrated IP
streaming, mobile-first connectivity, and smart home solutions. Effective
January 1, 2026, we made certain subscriber adjustments on a prospective
basis, reducing our subscriber base for mobile phones (18,000), connected
devices (78,000) and internet (30,000). See Section 5.4 in our second
quarter 2026 MD&A for further details.
Second quarter 2026 Operating Highlights
TELUS technology solutions (TTech)
-- TTech operating revenues (arising from contracts with customers)
decreased by $54 million or 1 per cent in the second quarter of 2026,
primarily reflecting lower mobile equipment revenue, as described below.
-- TTech EBITDA decreased by $22 million or 1 per cent in the second quarter
of 2026, while TTech Adjusted EBITDA was relatively flat reflecting: (i)
lower Other income, largely due to the impact of the comparative period's
non-recurring lease and other sublease revenue; (ii) mobile phone ARPU
declining at a decelerating rate; (iii) lower B2B data services revenue;
(iv) fixed legacy voice decline; (v) lower mobile equipment margins; (vi)
increased costs of subscription-based licences and cloud usage; and (vii)
lower residential internet revenue per customer. These factors were
mostly offset by: (i) subscriber base growth across mobile and internet;
(ii) cost reduction efforts, including workforce reductions and synergies
achieved from the privatization of TELUS Digital; (iii) security and
automation growth; (iv) TV growth; (v) lower bad debt expense; and (vi)
increased agriculture and consumer goods margin as a result of growth in
animal agriculture revenue. In addition to the drivers discussed within
TTech Adjusted EBITDA above, EBITDA also reflected an increase in
restructuring and other costs of $21 million in the second quarter of
2026, as a result of cost efficiency and effectiveness programs.
Mobile products and services
-- Mobile network revenue increased by $20 million or 1 per cent in the
second quarter of 2026, largely due to growth in our mobile phone
subscriber base, supported by ARPU declining at a decelerating rate.
-- Mobile equipment and other service revenues decreased by $65 million in
the second quarter of 2026, due to a reduction in contracted volumes,
partially offset by the impact of higher-value smartphones in the sales
mix.
-- TTech mobile products and services direct contribution increased by $21
million in the second quarter of 2026, reflecting stronger mobile network
revenue and subscriber base growth. These factors were partially offset
by a decline in mobile equipment margin from lower contracted volumes, in
addition to mobile phone ARPU declining at a decelerating rate.
-- Mobile phone ARPU was $56.36 in the second quarter of 2026, a decrease of
$0.22 or 0.4 per cent, as the continued positive impact of ongoing
efforts to moderate ARPU declines was offset by the adoption of base rate
plans with lower prices in response to continuing competitive promotional
pricing targeting both new and existing customers, a decline in roaming
revenues, and the commoditization of telecommunications services in the
public sector. We have noted sustained growth in the adoption of
unlimited data and Canada-U.S.-Mexico plans, which generate higher and
more stable ARPU on a monthly basis while also offering customers greater
cost certainty in lower roaming fees to the U.S. and Mexico, and lower
data overage fees, respectively.
-- Mobile phone gross additions were 348,000 in the second quarter of 2026,
reflecting a decrease of 28,000. This decrease was driven by a greater
emphasis on premium and profitable loading.
-- Our mobile phone churn rate was 1.08 per cent in the second quarter of
2026, compared to 1.06 per cent in the second quarter of 2025. The
increase was largely as a result of customer switching decisions in
response to continuing marketing and promotional price competition.
-- Mobile phone net additions were 17,000 in the second quarter of 2026, a
decrease of 38,000, driven by lower gross additions, prioritizing
value-accretive customer growth.
-- Connected device net additions were 187,000 in the second quarter of
2026, an increase of 75,000, driven by lower deactivations in the
transportation and connectivity industries.
Fixed products and services
-- Fixed data services revenues increased by $5 million in the second
quarter of 2026, driven by growth in our internet subscriber base, and TV
and security and automation revenues. This was partially offset by lower
B2B data services revenue, and lower residential internet revenue per
customer.
-- Fixed voice services revenues decreased by $13 million in the second
quarter of 2026, reflecting the ongoing decline in legacy voice revenues.
This was partially mitigated by the effects of our successful customer
retention efforts.
-- Fixed equipment and other service revenues decreased by $6 million in the
second quarter of 2026, driven primarily by lower premises equipment
sales.
-- TTech fixed products and services direct contribution decreased by $4
million in the second quarter of 2026, primarily driven by legacy voice
decline, lower B2B data services revenue, and lower residential internet
revenue per customer. These factors were partially offset by continued
growth in internet subscribers, security and automation, and TV from
programming savings and higher revenue.
-- Internet net additions were 20,000 in the second quarter of 2026, a
decrease of 7,000, primarily driven by higher internet churn, and lower
gross loading.
Agriculture and consumer goods services
-- Agriculture and consumer goods services revenues increased by $5 million
in the second quarter of 2026, largely as a result of growth in animal
agriculture revenues.
TELUS Health
-- Health services revenues increased by $19 million in the second quarter
of 2026, driven by: (i) global business acquisitions in employer
solutions and retirement and benefits solutions, including the
acquisition of Workplace Options in May 2025; and (ii) growth in payor
and provider solutions, with strong performance in collaborative health
records and an increase in recurring revenue related to our electronic
medical records solutions, increased patient health records and health
benefits management, and virtual pharmacy solutions. These factors were
offset by an organic decline in employer solutions driven by the
continued impact of prior year churn and pricing pressure.
-- TELUS Health direct contribution increased by $8 million in the second
quarter of 2026, reflecting revenue growth as described above.
-- TELUS Health EBITDA decreased by $16 million or 17 per cent in the second
quarter of 2026, while TELUS Health Adjusted EBITDA increased by $1
million or 1 per cent, reflecting revenue growth, as well as the ongoing
realization of acquisition integration synergies. These factors were
partially offset by higher indirect costs related to: (i) global business
acquisitions; (ii) the scaling of our digital and security capabilities,
inclusive of digital transformation; and (iii) higher regional marketing
costs. The difference between the growth rate of EBITDA and Adjusted
EBITDA is attributable to higher restructuring and other costs related to
cost efficiency and effectiveness programs.
-- Healthcare lives covered were 158.9 million as of the end of the second
quarter of 2026, an increase of 1.8 million, net of churn over the past
12 months, mainly reflecting growth in our EFAP across all of our
operating regions, in addition to the ongoing demand for virtual
solutions.
TELUS Digital
-- TELUS Digital operating revenues (arising from contracts with customers)
decreased by $75 million in the second quarter of 2026, primarily
attributable to: (i) client ramp-downs in our trust and safety service
line, coupled with a one-time receipt in the comparative period resulting
from a client's change in contractual scope; (ii) client ramp-downs in
our AI and data solutions service line; and (iii) an overall unfavourable
foreign currency impact on our operating results, primarily due to the
strengthening of the Canadian dollar against the U.S. dollar. This
decrease was partially offset by an increase in service volume within our
customer experience management service line.
-- TELUS Digital EBITDA decreased by $35 million in the second quarter of
2026, while TELUS Digital Adjusted EBITDA decreased by $17 million or 20
per cent. The decrease in EBITDA was primarily due to: (i) lower
Operating revenues; and (ii) increased restructuring and other costs
related to cost efficiency programs associated with client ramp-down from
service delivery centres out of Europe.
2026 Financial Outlook
TELUS is providing the following updated financial guidance for the full year 2026:
2026 Guidance Previous Updated
------------------------ ------------------------- -------------------------
Consolidated service 2% to 4% Flat to (2%)
revenue growth
Consolidated Adjusted 2% to 4% (2%) to (4%)
EBITDA growth
Capital expenditures Approximately $2.3 Approximately $2.6
billion billion
Free cash flow Approximately $2.45 Approximately $1.8
billion billion
------------------------ ------------------------- -------------------------
Consolidated service revenue is now expected to be flat to negative 2 per cent for the full year, as positive trends in mobility are being offset by pressure in other parts of our business, including fixed data, TELUS Digital and slower than anticipated growth in TELUS Health.
Consolidated Adjusted EBITDA is now expected to decline by 2 to 4 per cent, reflecting lower revenue growth which no longer will offset the non-recurring benefits realized in 2025, including real estate gains, acquisition-related adjustments and favourable one-time expense reductions.
Capital expenditures for 2026 are now expected to be approximately $2.6 billion, reflecting inflation and supply chain dynamics impacting customer premises equipment, strategic investment directed towards our sovereign AI data centres, including network infrastructure upgrades and site enablement, and additional investments directed towards customer base management. These are factors specific to 2026 and are not indicative of a broader shift in capital discipline. TELUS remains committed to reducing capital intensity over the multi-year horizon and will provide an update on the next step-down with its third quarter 2026 results.
Free cash flow for 2026 is now expected to be approximately $1.8 billion, reflecting lower Adjusted EBITDA, higher capital expenditures and incremental cash restructuring charges of $100 million (relative to our first quarter update) associated with the cost transformation program.
Please see "Caution regarding forward-looking statements" below for a description of the assumptions on which our financial outlook is based and the risks that could cause our actual results to differ materially from this outlook.
Corporate and Community Highlights
TELUS continues to make significant contributions to the Canadian economy and the communities it serves. In the first half of 2026, TELUS paid, collected and remitted approximately $1.2 billion in taxes and regulatory fees to federal, provincial and municipal governments, invested $1.3 billion in capital expenditures primarily in communities across Canada, disbursed spectrum renewal fees in excess of $50 million to Innovation, Science and Economic Development Canada in the first half of 2026, and generated a total team member payroll of $2 billion. Since 2000, TELUS has remitted more than $50 billion in total taxes and spectrum fees and invested over $60 billion in Canadian infrastructure.
In May 2026, TELUS celebrated the 21st anniversary of its annual TELUS Days of Giving, with a record-breaking 100,000 volunteers participating in 35 countries. The TELUS Friendly Future Foundation supported 294,000 youth through nearly $4.5 million in cash donations and bursaries in the first six months of 2026. Since 2000, TELUS and its team members have contributed more than $1.85 billion in cash, in-kind contributions, time and programs to communities across Canada and around the world.
In the first half of 2026, TELUS was recognized as one of the top 10 most valuable brands in Canada by Brand Finance, named to the Corporate Knights Best 50 Corporate Citizens in Canada in third place, and ranked as the most sustainable North American telecommunications company by TIME Magazine.
Further details on TELUS' community investment programs, environmental sustainability initiatives, and social impact metrics are available in the Company's second quarter 2026 MD&A and at telus.com.
Access to quarterly results information
Interested investors, the media and others may review this quarterly earnings news release, MD&A, financial statements, quarterly results slides, audio and transcript of the investor webcast call, supplementary financial information at telus.com/investors.
TELUS' second quarter 2026 conference call is scheduled for Friday, July 31, 2026 at 12:30 pm ET (9:30 am PT) and will feature prepared remarks and a slide presentation followed by a question and answer period with investment analysts. Interested parties can access the webcast at telus.com/investors. An archive of the webcast and presentation will be available on telus.com/investors and an audio recording will be available approximately 60 minutes after the call until October 1, 2026 at 1-855-201-2300. Quote conference access code 60535# and playback access code 60535#. A transcript will be posted on the website within a few business days.
Caution regarding forward-looking statements
This news release contains forward-looking statements about expected events and our financial and operating performance. Forward-looking statements include any statements that do not refer to historical facts. They include, but are not limited to, statements relating to our revised full-year financial outlook (including guidance regarding capital expenditures and capital intensity, free cash flow, consolidated service revenue and consolidated Adjusted EBITDA); the expected results from our three strategic imperatives; expectations regarding our capital returns framework and corporate strategy, including capital intensity and investment plans; our dividend payout ratio range, expected impact of our dividend reset and the termination of the discount under our DRIP; our targeted net debt to Adjusted EBITDA ratio and expectations regarding leverage; and the results of our strategic portfolio review processes. Forward-looking statements are typically identified by the words, assumption, goal, guidance, objective, outlook, strategy, target and other similar expressions, or verbs such as aim, anticipate, believe, could, expect, intend, may, plan, predict, seek, should, strive and will. These statements are made pursuant to the "safe harbour" provisions of applicable securities laws in Canada and the United States Private Securities Litigation Reform Act of 1995.
By their nature, forward-looking statements are subject to inherent risks and uncertainties and are based on assumptions, including assumptions about future economic conditions and courses of action. These assumptions may ultimately prove to have been inaccurate and, as a result, our actual results or other events may differ materially from expectations expressed in, or implied by, the forward-looking statements. The assumptions on which our 2026 outlook is based, as described in Section 9 in our 2025 annual MD&A, remain the same, except for the updates below as well as our estimates regarding economic growth, inflation, unemployment and housing starts, as discussed in Section 1.2 in our second quarter 2026 MD&A.
-- Our restructuring and other costs assumption has been revised to
approximately $900 million, from approximately $500 million. The increase
is a result of expanded operational effectiveness programs to support
EBITDA and cash flow growth. We estimate total cash restructuring and
other disbursements of approximately $650 million, from approximately
$450 million.
-- Our cash income tax payments assumption has been revised downward to a
range of approximately $240 million to $340 million from a range of
approximately $540 million to $620 million. This decrease was primarily
due to higher refunds received, Canadian Bill C-15 receiving royal assent
on March 26, 2026, and lower required income tax instalments attributable
to lower income before income taxes.
Risks and uncertainties that could cause actual performance or events to differ materially from the forward-looking statements made herein and in other TELUS filings include, but are not limited to, the following:
-- Regulatory matters. We operate in a number of highly regulated industries
and conduct business in many jurisdictions and are therefore subject to a
wide variety of laws and regulations domestically and internationally.
Policies and approaches advanced by elected officials and regulatory
decisions, reviews and other government activity may have strategic,
operational and/or financial impacts (including on revenue and free cash
flow).Risks and uncertainties include:
-- potential changes to our regulatory regime or the outcomes of
proceedings, cases or inquiries relating to its application,
including, but not limited to, those set out in Section 9.1
Communications industry regulatory developments and proceedings in
our 2025 annual MD&A and our second quarter 2026 MD&A;
-- our ability to comply with complex and changing regulation of the
healthcare, virtual care and medical devices industries in the
jurisdictions in which we operate, including as an operator of
health clinics; and
-- our ability to comply with, or facilitate our clients' compliance
with, numerous, complex and sometimes conflicting legal regimes,
both domestically and internationally.
-- Competitive environment. Competitor expansion, activity and intensity
(pricing, including discounting, bundling), as well as non-traditional
competition, disruptive technology and disintermediation, may alter the
nature of the markets in which we compete and impact our market share and
financial results (including revenue and free cash flow). The reduction
in the number of new permanent and temporary residents in Canada may
intensify competitive pressure. Different areas of our business including
TELUS Health and TELUS Digital also face intense competition in the
different markets in which we compete.
-- Technology. Consumer adoption of alternative technologies and changing
customer expectations have the potential to impact our revenue streams
and customer churn rates.Risks and uncertainties include:
-- disruptive technologies, including software-defined networks in
the business market and AI, that may displace or cause us to
reprice our existing data services, and self-installed technology
solutions;
-- any failure to innovate, maintain technological advantages or
respond effectively and in a timely manner to changes in
technology;
-- the roll-out, anticipated benefits and efficiencies, and ongoing
evolution of wireless broadband technologies and systems;
-- our reliance on wireless network access agreements, which have
facilitated our deployment of mobile technologies;
-- our expected long-term need to acquire additional spectrum through
future spectrum auctions and from third parties to meet growing
demand for data, and our ability to utilize spectrum we acquire;
-- deployment and operation of new fixed broadband network
technologies at a reasonable cost and the availability and success
of new products and services to be rolled out using such network
technologies; and
-- our deployment of self-learning tools and automation, which may
change the way we interact with customers.
-- Security and data protection. Our ability to prevent, detect and identify
potential threats and vulnerabilities depends on the effectiveness of our
security controls in protecting our infrastructure and operating
environment, and our timeliness in responding to attacks and restoring
business operations. A successful attack may impede the operations of our
network or lead to the unauthorized access to, interception, destruction,
use or dissemination of, customer, team member or business information
and confidential data. The necessary use of sensitive personal
information by our business may expose us to the risk of non-compliance
with applicable law in a jurisdiction or compromise perceptions of our
brand.
-- Generative AI (GenAI). GenAI exposes us to numerous risks, including
risks related to operational reliability, responsible AI usage, data
privacy and cybersecurity, the possibility that our use of AI may
generate inaccurate or inappropriate content or create negative
perceptions among customers, the risk that we may not develop and adopt
AI technologies effectively and could fail to achieve improved efficiency
through our use of GenAI or that the use of AI could reduce demand for
our services, and that regulation could affect future implementation of
AI.
-- Climate and the environment. Natural disasters, pandemics, disruptive
events and the effects of climate change may impact our operations,
customer satisfaction and team member experience. Our goals to achieve
carbon neutrality and reduce our greenhouse gas $(GHG)$ emissions in our
operations are subject to our ability to identify, procure and implement
solutions that reduce energy consumption and adopt cleaner sources of
energy, our ability to identify and make suitable investments in
renewable energy, including in the form of virtual power purchase
agreements, and our ability to continue to realize significant absolute
reductions in energy use and the resulting GHG emissions from our
operations.
-- Operational performance, business combinations and divestitures, and
TELUS Digital privatization. Investments and acquisitions present
opportunities to expand our operational scope, but may expose us to new
risks. We may be unsuccessful in gaining market traction/share or in
integrating acquisitions into our operations within expected timelines or
at all, we may not realize the expected benefits of acquisitions, and
integration efforts may divert resources from other priorities. There is
no assurance that we will realize any or all of the anticipated benefits
of the privatization of TELUS International (Cda) Inc. in the timeframe
anticipated or at expected cost levels, that we will be able to drive
cross-selling opportunities, or that our estimates and expectations in
relation to future economic and business conditions and the resulting
impact on growth and various financial metrics will prove to be
accurate.Risks relating to operational performance include:
-- our reliance on third-party cloud-based computing services to
deliver our IT services; and
-- economic, political and other risks associated with doing business
globally (including war and other geopolitical developments).We
may not be able to deliver the service excellence our customers
expect or maintain our competitive advantage in this area.
-- Our systems and processes. Systems and technology innovation, maintenance
and management may impact our IT systems and network reliability, as well
as our operating costs.Risks and uncertainties include:
-- our ability to maintain customer service and operate our network
in the event of human error or human-caused threats, such as
cyberattacks and equipment failures that could cause network
outages;
-- technical disruptions and infrastructure breakdowns;
-- delays and rising costs, including as a result of government
restrictions or trade actions; and
-- the completeness and effectiveness of business continuity and
disaster recovery plans and responses.
-- Our team. The rapidly evolving and highly competitive nature of our
markets and operating environment, along with the globalization and
evolving demographic profile of our workforce, and the effectiveness of
our internal training, development, succession and health and well-being
programs, may impact our ability to attract, develop and retain team
members with the skills required to meet the changing needs of our
customers and our business. Team members may face greater mental health
challenges associated with the significant change initiatives at the
organization, which may result in the loss of key team members through
short-term and long-term disability and churn. Integration of
international business acquisitions and concurrent integration activities
may impact operational efficiency, organizational culture and engagement.
-- Suppliers. We may be impacted by supply chain disruptions and lack of
resiliency in relation to global or local events. Dependence on a single
supplier for products, components, service delivery or support may impact
our ability to efficiently meet constantly changing and rising customer
expectations while maintaining quality of service. Our suppliers' ability
to maintain and service their product lines could affect the success of
upgrades to, and evolution of, technology that we offer.
-- Real estate matters. Real estate investments are exposed to possible
financing risks and uncertainty related to future demand, occupancy and
rental rates, especially following the pandemic. Future real estate
developments may not be completed on budget or on time and may not obtain
lease commitments as planned. We may be exposed to the risk of loss in
relation to our investments if the business plans of our real estate
joint venture developments are not successfully executed.
-- Financing, debt and dividends. Our ability to access funding at optimal
pricing may be impacted by general market conditions and changing
assessments in the fixed-income and equity capital markets regarding our
ability to generate sufficient future cash flow to service our debt.
Failure to complete planned deleveraging initiatives or to achieve the
anticipated benefits of those initiatives could increase our cost of
capital. Our current intention to pay dividends to shareholders could
constrain our ability to invest in our operations to support future
growth.Risks and uncertainties include:
-- our ability to use equity as a form of consideration in business
acquisitions is impacted by stock market valuations of TELUS
Common Shares;
-- our capital expenditure levels and potential outlays for spectrum
licences in auctions or purchases from third parties affect and
are affected by: our broadband initiatives; our ongoing deployment
of newer mobile technologies; investments in network technology
required to comply with laws and regulations relating to the
security of cyber systems, including bans on the products and
services of certain vendors; investments in network resiliency and
reliability; the allocation of resources to acquisitions and
future spectrum auctions held by Innovation, Science and Economic
Development Canada (ISED). Our capital expenditure levels could be
impacted if we do not achieve our targeted operational and
financial results or if there are changes to our regulatory
environment; and
-- lower than planned free cash flow could constrain our ability to
invest in operations, reduce leverage or return capital to
shareholders. Quarterly dividend decisions are made by our Board
of Directors based on our financial position and outlook. Common
Shares may be purchased under our normal course issuer bid (NCIB)
when and if we consider it opportunistic, based on our financial
position and outlook, and the market price of our Common Shares.
There can be no assurance that our NCIB will be maintained,
unchanged and/or completed.
-- Tax matters. Complexity of domestic and foreign tax laws, regulations and
reporting requirements that apply to TELUS and our international
operating subsidiaries may impact financial results. International
acquisitions and expansion of operations heighten our exposure to
multiple forms of taxation.
-- The economy. Changing global economic conditions, including a potential
recession and varying expectations about inflation, as well as our
effectiveness in monitoring and revising growth assumptions and
contingency plans, may impact the achievement of our corporate objectives,
our financial results (including free cash flow), and our defined benefit
pension plans. Geopolitical uncertainties and changes in trade policies
and agreements, including tariffs or trade restrictions, could increase
our costs, disrupt our supply chains and adversely affect our operations
and financial results. They present a risk of recession and may cause
customers to reduce or delay discretionary spending, impacting new
service purchases or volumes of use, and to consider substitution by
lower-priced alternatives.
-- Litigation and legal matters. Complexity of, and compliance with, laws,
regulations, commitments and expectations may have a financial and
reputational impact.Risks include:
-- our ability to defend against existing and potential claims or our
ability to negotiate and exercise indemnity rights or other
protections in respect of such claims; and
-- the complexity of legal compliance in domestic and foreign
jurisdictions, including compliance with competition, anti-bribery
and foreign corrupt practices laws.
These risks and the assumptions underlying our forward-looking statements are described in additional detail in Section 9 General trends, outlook and assumptions, and regulatory developments and proceedings and Section 10 Risks and risk management in our 2025 annual MD&A. Those descriptions are incorporated by reference in this cautionary statement but are not intended to be a complete list of the risks that could affect the Company, or of our assumptions.
Additional risks and uncertainties that are not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation. Except as otherwise indicated in this document, the forward-looking statements made herein do not reflect the potential impact of any non-recurring or special items or any mergers, acquisitions, dispositions or other business combinations or transactions that may be announced or that may occur after the date of this document.
Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements in this document describe our expectations, and are based on our assumptions, as at the date of this document and are subject to change after this date. Forward-looking statements in this release, in particular regarding our financial outlook, are presented for the purpose of assisting our investors and others in understanding certain key elements of our expected 2026 financial results as well as our objectives, strategic priorities and business outlook. Such information may not be appropriate for other purposes. We disclaim any intention or obligation to update or revise any forward-looking statements except as required by law.
This cautionary statement qualifies all of the forward-looking statements in this document.
Non-GAAP and other specified financial measures
We issue guidance on and report certain non-GAAP measures that are used to evaluate the performance of TELUS, as well as to determine compliance with debt covenants and to manage our capital structure. As non-GAAP measures generally do not have standardized meanings, they might not be comparable to similar measures disclosed by other issuers. Securities regulations require that such measures be clearly defined, qualified and reconciled with their nearest GAAP measure. Certain of the metrics do not have generally accepted industry definitions.
Adjusted Net income and adjusted basic earnings per share (EPS): These are non-GAAP measures that do not have any standardized meanings prescribed by IFRS Accounting Standards and are therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted Net income excludes the effects of restructuring and other costs, real estate rationalization-related restructuring impairments, income tax-related adjustments, long-term debt prepayment premium, and other adjustments (identified in the following tables). Adjusted basic EPS is calculated as adjusted Net income divided by the basic weighted-average number of Common Shares outstanding. These measures are used to evaluate performance at a consolidated level and exclude items that, in management's view, may obscure underlying trends in business performance or items of an unusual nature that do not reflect our ongoing operations. They should not be considered as alternatives to Net income and basic EPS in measuring TELUS' performance.
Reconciliation of adjusted Net income
Three months ended
June 30
C$ millions 2026 2025
-------------------------------------------------------- ------------ ------
Net income (loss) attributable to Common Shares (1,840) 7
Add (deduct) amounts net of amount attributable to
non-controlling interests:
Restructuring and other costs 189 104
Tax effects of restructuring and other costs (23) (25)
Real estate rationalization-related restructuring
impairments -- 1
Long-term debt prepayment premium 51 --
Tax effect of long-term debt prepayment premium (14) --
Impairment of intangible assets and goodwill 2,135 285
Tax effect of impairment of intangible assets and
goodwill (219) (13)
Income tax-related adjustments (25) (17)
Adjusted Net income 254 342
-------------------------------------------------------- ------------ ------
Reconciliation of adjusted basic EPS
Three months ended
June 30
C$ 2026 2025
-------------------------------------------------------- --------- ---------
Basic EPS (1.17) --
Add (deduct) amounts net of amount attributable to
non-controlling interests:
Restructuring and other costs, per share 0.12 0.07
Tax effect of restructuring and other costs, per
share (0.02) (0.02)
Long-term debt prepayment premium, per share 0.03 --
Tax effect of long-term debt prepayment premium, per
share (0.01) --
Impairment of intangible assets and goodwill, per
share 1.36 0.19
Tax effect of impairment of intangible assets and
goodwill, per share (0.14) (0.01)
Income tax-related adjustments, per share (0.01) (0.01)
Adjusted basic EPS 0.16 0.22
-------------------------------------------------------- --------- ---------
EBITDA (earnings before interest, income taxes, depreciation and amortization): We issue guidance on and report EBITDA because it is a key measure used to evaluate performance at a consolidated level. EBITDA is commonly reported and widely used by investors and lending institutions as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric. EBITDA should not be considered as an alternative to Net income in measuring TELUS' performance, nor should it be used as a measure of cash flow. EBITDA as calculated by TELUS is equivalent to Operating revenues and other income less the total of Goods and services purchased expense and Employee benefits expense.
We calculate Adjusted EBITDA by excluding items of an unusual nature that do not reflect our ongoing operations and should not, in our opinion, be considered in a long-term valuation metric or should not be included in an assessment of our ability to service or incur debt.
EBITDA and Adjusted EBITDA reconciliations
-----------------------------------------------------------------------------------------------
TELUS
TTech Health TELUS Digital Eliminations Total
Three months
ended June 30
(C$ millions) 2026 2025(1) 2026 2025(1) 2026 2025(1) 2026 2025 2026 2025
-------------- ----- ------- ---- ------- ------- ------- ----- ------- ------- -----
Net income (1,830) (245)
----- ------- ---- ------- ------- ------- ----- -------
Financing
costs 420 373
----- ------- ---- ------- ------- ------- ----- -------
Income taxes (162) 47
-------------- ----- ------- ---- ------- ------- ------- ----- ------- ------- -----
EBIT 764 812 (35) (19) (2,268) (603) (33) (15) (1,572) 175
Depreciation 526 535 15 10 50 56 -- -- 591 601
Amortization
of intangible
assets 273 238 95 100 66 65 -- -- 434 403
Impairment of
intangible
assets and
goodwill -- -- -- -- 2,135 500 -- -- 2,135 500
EBITDA 1,563 1,585 75 91 (17) 18 (33) (15) 1,588 1,679
Add
restructuring
and other
costs
included in
EBITDA 76 55 24 7 89 71 -- -- 189 133
-------------- ----- ------- ---- ------- ------- ------- ----- ------- ------- -----
EBITDA --
excluding
restructuring
and other
costs and
Adjusted
EBITDA 1,639 1,640 99 98 72 89 (33) (15) 1,777 1,812
-------------- ----- ------- ---- ------- ------- ------- ----- ------- ------- -----
(1) 2025 results have been restated.
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