BCE Inc. (BCE:CA) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed sentiment. While there are positive elements like the strategic fiber network expansion and AI growth, there are concerns such as declining advertising revenue and cautious guidance on wireless pricing. The Q&A reveals management's optimism but also highlights uncertainties in the wireless market and non-core asset sales. The lack of specific guidance details and aggressive market promotions by peers could weigh on investor sentiment. Overall, the mixed signals and strategic focus suggest a neutral impact on the stock price.
Key Financial Performance
Postpaid churn Improved for the third consecutive quarter with a 17 basis point year-over-year improvement in Q4. This improvement is attributed to customer-first initiatives.
Wireless service revenue Declined 0.2% year-over-year in Q4, an improvement from the 0.4% decline in Q3 and better than the 1.5% decline in Q4 of last year. Consumer wireless service revenue was stable year-over-year in the quarter.
Fiber-to-the-home Internet net adds 43,000 net adds in Q4, reflecting disciplined pricing and a slowdown in Canadian fiber build.
Internet revenue Increased approximately 2% year-over-year in Q4, supported by fiber growth and disciplined pricing.
AI-powered solutions revenue Grew 31% year-over-year in Q4, driven by momentum at Ateko and Bell Cyber.
Adjusted EBITDA margin Increased 130 basis points year-over-year to 44.2% in Q4, reflecting strong cost discipline and margin-accretive subscriber growth.
Bell Media digital revenues Increased 6% year-over-year in 2025, now representing 44% of total media revenue. Growth driven by Crave and connected TV.
Crave subscribers Added more than 1 million subscribers in 2025, ending with 4.6 million subscribers. Growth supported by expanded content library and user experience enhancements.
Adjusted EBITDA Increased 0.7% year-over-year in 2025, driving a 20 basis point improvement in adjusted EBITDA margin to 43.6%, the strongest annual margin result in over 30 years.
Free cash flow Increased 10% year-over-year to $3.2 billion in 2025, driven by higher EBITDA, lower CapEx, and improved working capital.
Capital expenditures Declined by $197 million to $3.7 billion in 2025, resulting in a capital intensity of 15.1%, in line with guidance.
Bell CTS U.S. revenue $232 million in Q4, driven by Ziply Fiber's operations and strong customer penetration in new and existing markets.
Bell CTS U.S. EBITDA $100 million in Q4, representing a 43.1% margin, supported by Ziply Fiber's fiber platform.
Bell Media advertising revenue Declined 11.1% year-over-year in Q4, reflecting softness in traditional advertising and the impact of divested radio stations.
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Operating Highlights
Differentiated wireless plan tiers: Launched new wireless plans that move beyond traditional data buckets, offering choices based on network performance, video quality, roaming features, device financing, and bundled content.
AI-powered voice virtual assistant: Rolled out across Bell, Virgin Plus, and Lucky Mobile to simplify interactions and improve service quality.
Hardware-free Fibe TV: Launched a full-service experience without the need for a set-top box, allowing customers to use their own devices.
Crave platform enhancements: Expanded content library by 10,000 hours, integrated live programming, and improved user experience.
U.S. fiber expansion: Acquired Ziply Fiber, providing a platform for long-term growth in the U.S. market. Targeting 3 million fiber passings by 2028 with potential to reach 8 million.
Distribution expansion in Quebec: No name mobile now available in all Maxi stores across Quebec, extending access to affordable wireless options.
Postpaid churn improvement: Achieved a 17 basis point year-over-year improvement in Q4, marking the third consecutive quarter of improvement.
Cost savings: Targeting $1.5 billion in cost savings by 2028, with a 6.1% reduction in operating costs in Q4 2025.
Adjusted EBITDA margin: Improved to 43.6% in 2025, the strongest annual margin in over 30 years.
AI-powered enterprise solutions: Launched Ateko, Bell Cyber, and Bell AI Fabric, collectively growing 60% year-over-year to $700 million in revenue. Targeting $1.5 billion by 2028.
Content monetization: Focused on premium content delivery through digital platforms and monetizing content across the value chain.
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Risk or Challenges
Market Conditions: Continued softness in traditional advertising demand and non-sports programming, as well as the impact of divestiture of 45 radio stations, which affected revenue.
Competitive Pressures: Focus on balancing subscriber growth with financials and customer experience, indicating challenges in maintaining market share while ensuring profitability.
Regulatory Hurdles: No explicit mention of regulatory hurdles in the transcript.
Supply Chain Disruptions: No explicit mention of supply chain disruptions in the transcript.
Economic Uncertainties: Higher interest expenses due to increased debt levels and depreciation costs from ongoing network investments, which could strain financial performance.
Strategic Execution Risks: Execution of fiber expansion plans in the U.S. market, including the reprioritization of build plans toward higher-growth markets, which could face delays or cost overruns.
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Guidance & Outlook
Revenue Growth: For 2026, BCE expects consolidated revenue growth of 1% to 5%, driven by momentum in core growth engines such as fiber, wireless, AI-powered enterprise solutions, and digital media.
Adjusted EBITDA Growth: BCE projects adjusted EBITDA growth of 0% to 4% in 2026, reflecting a step-up from 2025 levels.
Adjusted EPS: Adjusted EPS is expected to be in the range of $2.5 to $2.65 per share in 2026, representing a 5% to 11% decline compared to 2025, primarily due to higher depreciation, amortization, and interest expenses.
Free Cash Flow: Free cash flow is projected to grow between 4% and 10% in 2026, supported by higher EBITDA and lower severance payments, offset by increased interest expenses.
Capital Expenditures: Capital expenditures are expected to remain stable at approximately $3.7 billion in 2026, resulting in a lower capital intensity of 15% or less.
Fiber Expansion: The Ziply Fiber build plan is set to accelerate in 2026, targeting approximately 3 million fiber passings by the end of 2028.
AI-Powered Solutions Revenue: BCE aims to scale its AI-powered solutions businesses, targeting $1.5 billion in revenue by 2028, with continued growth in 2026.
Bell Media Revenue and EBITDA: Bell Media is expected to deliver consistent annual revenue and EBITDA growth, supported by digital and subscription revenue streams.
Dividend Payout Ratio: BCE expects its dividend payout ratio to remain within the target policy range of 40% to 55% in 2026.
Net Debt Leverage Ratio: The net debt leverage ratio is expected to trend down in 2026 toward the target of 3.5x by the end of 2027.
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Shareholder Return Plan
Dividend Sustainability: BCE has emphasized its commitment to returning capital to shareholders through a sustainable dividend. The company has outlined its roadmap for capital allocation, which includes maintaining a dividend payout ratio comfortably within the target policy range of 40% to 55%.
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Key Q&A
Q:Could you talk about your guidance ranges, 1% to 5% and 0% to 4%, and what factors are influencing them?
A:The guidance reflects growth in premium Bell loadings, churn, product intensity, fiber net, AI-powered solutions revenue, Bell Media revenue, and U.S. opportunities. Swings include wireless penetration gains, market growth, pricing in wireless and wireline, legacy declines, economic environment, and momentum in AI-powered solutions and cost transformation.
Q:Any comment on the wireless pricing environment and promotional activity in January?
A:The CEO emphasized the value provided to consumers through wireless services, including lower prices and improved features. Bell remains disciplined, focusing on premium tier loadings, service revenue trajectory, and base management. Aggressive promotions by peers were noted, but Bell chose not to participate, focusing on profitable transactions.
Q:What is baked into the guidance for Ziply, and how should we think about growth and margins in that business in '26?
A:Ziply's performance remains above the initial investment case, with strong demand for fiber. The focus is on fiber penetration gains and long-term economics. Capital intensity is managed on a consolidated basis, with a shift in CapEx spending from Canada to the U.S.
Q:Have you changed your expectations for 2026 after recent wireless landscape developments?
A:The guidance ranges already account for recent developments. Moderate ARPU growth by Q4 2026 may be challenging due to pricing seen in late 2025 and early 2026, but there is optimism for a return to previous pricing levels.
Q:What are the next steps for AI Fabric, and are there potential catalysts?
A:The 2026 plan includes monetizing a small portion of available capacity. Active discussions are ongoing, with strong interest and a robust sales funnel.
Q:What are your assumptions for 2026 wireless subscriber growth and ARPU?
A:Wireless market growth is expected to be low single-digit, reflecting a mature market. Bell remains disciplined, focusing on accretive loadings and product intensity. ARPU growth remains a goal, with 11 months left in the year to achieve targets.
Q:How much upside can BCE achieve from leveraging its fiber footprint for wireless market share?
A:BCE sees significant upside, targeting a 25% product intensity increase by 2028. The strategy leverages an expansive fiber footprint, premium content, and wireless leadership.
Q:What is the strategy for Ziply in the U.S. given the competitive environment?
A:Ziply's strategy remains focused on fiber penetration gains. Pricing is competitive, and the build plan is being expanded beyond the ILEC footprint to include broader geographic areas. A deliberate reset in the build plan will lead to a ramp-up in the back half of 2026.
Q:Are there updates on non-core asset sales to optimize the balance sheet?
A:Asset sales are part of the strategy to reach a 3.5x net leverage target by 2027. Files are underway, and updates will be provided as agreements are reached.
Q:Will Enterprise segment revenue be disclosed discretely starting in Q1?
A:Yes, more detailed disclosure for the Enterprise segment will begin in Q1.
Q:What is BCE's approach to employee purchase plans (EPP) in the wireless segment?
A:BCE has addressed past gaps in EPP functionality but remains disciplined, focusing on accretive loadings and competitive pricing in each segment.
Q:What are BCE's plans for convergence in the U.S. and Canada?
A:In the U.S., a converged offering is not currently required but may be considered in the future. In Canada, BCE aims to provide Western consumers with a fiber option but faces challenges with service delivery from the underlying network owner.
Q:What are the assumptions around international roaming as a contributor to ARPU?
A:Roaming trends improved sequentially in Q4, with a low single-digit decline, indicating potential for future ARPU performance improvement.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the percentage of BCE's wireline footprint that is also a wireless customer, citing a general strategic perspective instead. Additionally, no specific updates were given on the size of the U.S. build plan for 2026 or detailed M&A opportunities, with responses remaining general and non-committal.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI scale
AI solution
AI voice
America party
Ateko acquisition
BCE change
Bell Pure
Bell core
Bell ecosystem
Bell proportion
Bell way
Curtis
Investor Day
Pure Fibre
SDK Tek
Ziply
addition
choice
customer focus
enterprise AI
enterprise medium
fiber expansion
fiber network
fiber platform
lead
lifetime value
momentum customer
name
network customer
number service
phase
place
premium
product intensity
quality
roadmap
segment
service household
sheet capital
simplifies
solution Bell
subscription
BCE Transcript
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Positive2-5
The earnings call highlights strong financial performance, including record net profit, improved CET1 ratio, and a commitment to shareholder returns. The Q&A section reveals management's focus on profitability, efficiency, and strategic acquisitions. While some uncertainties remain regarding the timeline for certain targets, the overall sentiment is positive, driven by strong earnings, dividend payouts, and strategic growth plans.
BCE Inc. (BCE:CA) Q4 2025 Earnings Call Transcript
Unknown2-5
The earnings call presents a mixed sentiment. While there are positive elements like the strategic fiber network expansion and AI growth, there are concerns such as declining advertising revenue and cautious guidance on wireless pricing. The Q&A reveals management's optimism but also highlights uncertainties in the wireless market and non-core asset sales. The lack of specific guidance details and aggressive market promotions by peers could weigh on investor sentiment. Overall, the mixed signals and strategic focus suggest a neutral impact on the stock price.
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Neutral12-9
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Unknown11-8
Despite an 11.3% EBITDA increase, concerns include flat margin expectations and unclear tax benefits. Positive factors are AI Fabric's growth potential and strong free cash flow. The Q&A shows cautious optimism, with management providing limited specifics on tax benefits and satellite service details. Overall, the mixed guidance and lack of clarity on certain aspects lead to a neutral sentiment.
BCE Slides
BCE Report
Frequently Asked Questions
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
