TELUS Q2 2025 Earnings Call: Key Takeaways

TELUS Corporation's Q2 2025 earnings call revealed positive financial results, with revenue growth of 5.4% and net income of $475 million. The company's CEO, Darren Entwistle, attributed the strong performance to its diversified business model and strategic investments in innovation and customer experience. TELUS also announced a $100 million share repurchase program and increased its dividend by 5%.

TELUS Corporation reported its Q2 2025 earnings on August 1, revealing an earnings per share (EPS) of CAD 0.22, slightly below the forecasted CAD 0.2314, resulting in a 4.93% surprise miss [1]. Despite this, the company exceeded revenue expectations, reporting CAD 5.08 billion against a forecast of CAD 5.02 billion. TELUS maintains strong profitability with a 59.7% gross margin and has demonstrated consistent shareholder returns, having raised its dividend for 21 consecutive years.

The company's EPS fell short of expectations, marking a 4.93% negative surprise, but revenue exceeded forecasts by 1.2%, indicating strong operational performance despite EPS challenges. This mixed result contrasts with previous quarters where TELUS met or exceeded EPS forecasts, suggesting potential headwinds in profitability. TELUS's revenue growth was driven by mobile and fixed customer additions, with mobile phone and connected device additions of 167,000 and fixed customer additions of 31,000, respectively.

TELUS's fixed data services grew by 3%, while revenue from mobile networks slightly decreased. The company launched an AI platform and expanded broadband services in Ontario and Quebec. Free cash flow increased by 11% year-over-year to CAD 535 million. Stock price dropped 2.37% in pre-market trading following the earnings report.

Key Takeaways
TELUS reported a 4% growth in EBITDA, including TELUS Health. The company's strategic investments in AI and infrastructure are aimed at maintaining its competitive edge. TELUS trading at an EV/EBITDA multiple of 8.05x, suggesting reasonable valuation for its growth prospects. Despite a slight decrease in mobile network revenue, TELUS's fixed data services and customer growth in both mobile and fixed segments highlight its resilience in a competitive market.

Market Reaction
Following the earnings release, TELUS shares declined 2.37% in pre-market trading, settling at CAD 21.79. This movement reflects investor concerns over the EPS miss and broader market trends. InvestingPro data indicates TELUS generally trades with low price volatility, with a beta of 0.61, and offers a significant 4.05% dividend yield.

Outlook & Guidance
For 2025, TELUS aims for operating revenue growth of 2-4% and adjusted EBITDA growth of 3-5%. The company plans to focus on deleveraging and expanding its AI and digital service capabilities. TELUS demonstrated strong operational execution with an EBITDA of $44.61 billion in the last twelve months and a solid Financial Health Score of 2.56 (rated as GOOD) by InvestingPro.

Executive Commentary
CEO Darren Entwistle emphasized TELUS’s commitment to providing differentiated services, stating, "We are delivering much more than just affordable Internet, we’re providing Canadians with differentiated and unique competitive services." Tobias Beutel, from TELUS Digital, noted a shift in AI deployment, highlighting, "The second half of this year we’re seeing a real transition in the marketplace from proofs of concept to actual production level deployment of AI."

Risks and Challenges
Potential pressure on EPS due to competitive market dynamics. Challenges in maintaining revenue growth amid pricing stabilization in the wireless market. Risks associated with large capital expenditures and their impact on cash flow. Execution risks in AI and digital transformation initiatives. Macroeconomic factors that could affect consumer spending and investment.

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-telus-q2-2025-misses-eps-forecast-stock-dips-93CH-4166587